BARBADOS Trends and Developments Contributed by: Debbie Fraser, Joanna M. Austin and Makela Harrison-Yarde, Fraser Law
Companies on completion of a transfer of beneficial ownership. At present, compliance has not been a significant deterrent to parties wishing to complete M&A, and over time has evolved into merely an added, though onerous, part of doing business. Regulators are also becoming more receptive to discussions with parties, with the aim of facilitating business while ensuring that a robust regulatory framework is maintained – in order to solidify Barbados’ reputation as an efficient and compliant jurisdiction in which to do business. Finance Most transactions in recent times have been 100% cash-based, particularly when the purchasers reside within the Caribbean region and domestically, and with the funding being sourced from regional com - mercial banks. The most common security is security over commercial assets. There have also been a few transactions where a blend of cash and equity was used; however, in the firm’s experience this approach has been utilised in larger M&A deals, such as those initiated by Canadian listed entities that have used a combination of cash and equity for the acquisition of larger Barbados entities. On an even smaller scale, M&A with a buy and leaseback structure have been seen. Environmental, Social and Governance (ESG) ESG considerations are paramount for many purchas - ers considering the acquisition of businesses. Interna - tionally, entities with a good ESG reputation or score are becoming increasingly attractive to investors, and this is no different in Barbados; many of the larger Barbados companies are making ESG a part of their business. The existing ESG unofficial rating of a target entity can impact the investor’s brand, so businesses continue to align themselves with more favourable business structures. While some investors may not conduct a focused ESG due diligence survey, they do consider the obvi - ous things such as board structure, the nature of the business, the environmental impact and steps taken by the entity to mitigate any environmental damage. Domestically, a good governance policy is also cru - cial, as a merger with an entity that does not meet
compliance standards or has been fined for non-com - pliance could have a negative impact on the overall business. There have been early discussions as to whether regulatory approvals in future will come with “ESG targets”, additional corporate social responsibil - ity and the requirement to make a contribution to the community in which the businesses are located (eg, manufacturing entities). The firm continues to watch for developments in this regard. Data Privacy and Artificial Intelligence With the increased emphasis on data privacy and security, parties have to consider the impact of data privacy laws on M&A transactions. The Data Pro - tection Act of Barbados (DPA) provides that a data subject must authorise the transfer of personal data, except in the limited circumstances where consent is not required. It may not be practical to obtain the consent of an entire client base in order to facilitate early due dili - gence disclosure requirements or the transfer of per - sonal data on completion of a M&A transaction. The firm is not aware of any adjudication by the High Court of Barbados on the DPA, and it therefore does not appear that the exemption on the basis of “legitimate interests” provided for in the DPA will apply to M&A transactions. As a practical matter, at the due diligence stage, parties should consider redacting elements of personal data, such as names and dates of birth, to ensure persons are not personally identifiable from the data provided – and thus that there is no breach of the DPA. The transferor must also ensure that the person - al data will be held securely once transferred. In 2023, the Central Bank of Barbados issued its Technology and Cyber Risk Management Guideline, followed by the Cyber Risk Management Guideline issued by the FSC in December 2024, reflecting increasing con - cerns of regulators that data be protected. Locally, the use of artificial intelligence (AI) in busi - ness is developing, and the use of AI as a critical tool in M&A is anticipated, particularly in conducting due diligence given the ability of AI to condense and sum - marise large amounts of data quickly. It is anticipated that AI will be utilised by parties to identify the key legislative requirements across multi-
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